Motorola to Purchase Semiconductor Plant in Scotland

Motorola Inc. said it will spend $2 billion to buy and outfit a Scotland semiconductor plant owned by Hyundai Corp., a move to ease a shortage of parts for mobile phones. Motorola will pay $159.6 million for the 150-acre site in Dunfermline, the Scotsman newspaper reported. The company wouldn’t comment on the price. Motorola will spend the rest over five years to equip the 1-million-square-foot building, unused since Seoul-based Hyundai stopped construction in 1998. Demand is surging for Motorola’s popular StarTac and other cellular phones, leading to a shortage of components that stifled the company’s phone sales in the last two quarters. Motorola said the plant will make chips for the company’s own wireless devices as well as for other manufacturers, and will generate more than $2 billion in annual revenue once it’s running at full capacity. “Demand is very strong, and they need the capacity,” said Gruntal & Co. analyst Mona Eraiba, who rates Motorola stock an “outperform.” Motorola shares rose $3.75 to close at $111 on the New York Stock Exchange. The stock has fallen 25% this year but is up 46% in the last 12 months.